Private Regulation of Medicine: A Win-Win-win For Doctors, Patients and Public

Washington is hyperactive these days over healthcare and medical malpractice reforms. Just several days ago Health Caucus Chair Rep. Burgess prescribed a medical liability reform that would cap damages to injured patients. But such a proposal misses the main point: healthcare costs continue to rise because current medical liability policy fails to encourage compliance with evidence-based medicine. It can take up to 17 years for physicians to implement cutting edge procedures.

These are serious problems. Health care costs are estimate at $2.4 trillion dollars which is about 17-18 percent of the GDP, a percentage which is twice as much as any other country in the World. Medical errors are estimated to be associated with up to 98,000 deaths every year, about twice as many as from car accidents. Anyone who cares must ask whether there is any way Congress can be helpful.

A step in the right direction was taken last month when President Obama hinted that he favored making medical liability reform part of broader healthcare reform which will encourage evidence-based medicine. Also encouraging, the American Medical Association's incoming president proposed that doctors should be exempt from liability for following medical guidelines.

The problem -- and it's significant -- is that current guidelines by and large do not work, because they are not produced under the appropriate incentives. Without appropriate incentives, costs savings will not be achieved and immunity for doctors from medical malpractice cannot be justified.

Currently, various professional medical organizations -- such as the American Heart Association -- create guidelines for medical practice. But a recent study found that only half of all cardiac guidelines are based on scientific evidence.

Unfortunately, these organizations often struggle to provide guidelines that optimize care while minimizing unnecessary costs because they have neither the resources nor the financial incentive to invest in the continual improvement that is necessary to keep up with quickly evolving medical fields.

In 2001, a study examined the validity of clinical guidelines developed in 1990 through 1996 by the U.S. Agency for Health care Policy and Research and found that about two-thirds were out of date with current research.

A related problem is that many professional organizations and the clinical practice studies which they rely on have strong ties to drug or medical device companies -- businesses that would benefit greatly from guidelines recommending use of their products. A 2002 study involving 192 guidelines found that 58 percent of authors surveyed had received financial support to perform clinical research. About a fifth of respondents believe their coauthors' recommendations were influenced by their relationships with these companies.

Compounding the problem, these organizations are not subject to financial liability for their recommendations. Not surprisingly, many doctors suspect the guidelines do not reflect untainted, evidence-based advice. A recent study found that more than 50 percent of doctors say they pay no attention to the guidelines.

A market of private firms could set the gold standard of patient care by developing guidelines and competing for hospitals and doctors. The firms could offer doctors a safe harbor by bearing the costs of medical malpractice lawsuits provided doctors comply with their prescribed guidelines. The private firms, unlike current organizations that create guidelines, would be held liable for promulgating suboptimal guidelines. They would benefit by producing cost saving procedures to attract customers while also maximizing patient safety to avoid liability.

Granting doctors who follow such guidelines immunity from malpractice would go a long way toward meeting the nation's goals of minimizing healthcare costs while maximizing patient safety.

The private firms would have a strong interest in funding objective scientific research to create evidence-based medicine. Imagine the peace of mind that would follow for doctors who could trust guideline standards and no longer fear patients will sue them. Imagine a health care system in which doctors could focus on healing their patients instead of preparing for their day in court.